HandHeld Entertainment, the tiny US company that launched a portable video viewer way before the video iPod and for half the price, has acquired Putfile.com, which offers a free digital media service featuring user-generated content.
The deal is valued at $7.1 million the companies said, but only $1.08 million of that was paid in cash, and the rest is in HandHeld Entertainment common stock.
Putfile.com says it has one of the largest online video networks in its market which includes more than 425,000 free and premium videos which have attracted 13.7 million visitors during January.
Handheld has always had a problem attracting high quality content to its portable platform, and this suggests that it has opted to go the UGC route.
Under terms of the acquisition, HandHeld paid $500,000 in cash at closing and $580,000 over 12 months in equal monthly payments, plus 2,092,050 shares of restricted common stock.